Iemma vows to protect public servants' jobs

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Frontline public servants, such as teachers, nurses and the
police, will be quarantined from staffing cuts when the Premier,
Morris Iemma, reviews state spending to rein in the newly
discovered deficit.

Mr Iemma, who is also Treasurer, yesterday confirmed the
assessment of his Finance Minister, Michael Costa, that NSW was
probably already in deficit before the Government announced it was
scrapping the vendor tax.

"We have to be careful to ensure [the operational deficit]
doesn't become a structural one," he said. "That is why … I
announced the review, the audit of our finance and our
administration."

The decision to axe the unpopular tax has added $358 million to
the deficit, but Mr Iemma refused to say how far the state was in
the red.

"We make no apologies for the abolition of the vendor duty.
Let's be very clear about this. The [abolition of the] vendor duty
is about lifting economic activity."

He added: "We are not trying to throw the baby out with the
bathwater … in the sense of tight fiscal discipline.

"We have the challenge to ensure [the deficit] doesn't become
locked in. And that's behind a determined effort to find savings
and discipline on expenditure."

But Mr Iemma insisted there would be no change to the ALP's
policy of no forced redundancies in the public service, prompting
the Opposition to claim this would leave him hamstrung and unable
to shed staff whose skills were no longer required.

"They are setting themselves targets they can't achieve by
locking themselves in to no forced redundancies," the Opposition
Leader, John Brogden, said.

The Opposition's shadow treasurer, Peta Seaton, said: "If the
Government will not get rid of the no-forced-redundancy policy, how
is it possible to trim back the public service and achieve the
savings that are desperately needed?"

But Mr Iemma pointed to his experience in the health portfolio
as proof that savings could be found without forced redundancies:
"I am confident we will find the savings and I can tell you that in
Health we did. And not only did we find them, but we exceeded our
targets."

Mr Brogden said all the signs were that the property market was
still falling, and was not likely to recover as forecast.

"What is remarkable is that it is only August 3 - barely one
month after the start of the 2005-06 financial year," he said.

"So Bob Carr, Andrew Refshauge and Morris Iemma, as Minister for
Health, all knew that the budget document put before Parliament in
May was a complete fantasy."

Ms Seaton also likened NSW's Labor Government to that of failed
former Victorian premier, Joan Kirner.

"Joan Kirner effectively drove Victoria into bankruptcy in the
early 1990s because she borrowed money to pay for her own waste and
mismanagement," Ms Seaton said.